CESTAT Allows Cenvat Credit On Waste Treatment Services While Manufacturing Final Product
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit on waste treatment services for the factory's waste treatment arising out of the manufacturing of the final product.The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the waste treatment service received by the appellant from Bharuch...
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit on waste treatment services for the factory's waste treatment arising out of the manufacturing of the final product.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the waste treatment service received by the appellant from Bharuch Enviro Infrastructure Limited is an admissible input service used in or in relation to the manufacture of their excisable goods.
The issue raised was whether the appellant is entitled to cenvat credit in respect of waste treatment services received from Bharuch Enviro Infrastructure Limited, Ankleshwar, for treatment of their factory's waste that arises out of the manufacture of the final product.
The appellant submitted that the requirement for treating factory waste is as per the Gujarat Pollution Board. According to the consent of GPCB, the appellant has to mandatorily follow the rules for specific disposal of trade effluents and emissions, as per the specifications listed by GPCB in the consent order of GPCB. The consent order specifically mandated that high COD and low TDS effluents be sent to BEIL, a GPCB-controlled site, for proper treatment and disposal of the waste. The treatment of the waste arising out of the manufacture is mandatory as per the Gujarat Pollution Control Board, and without complying with the order of the GPCB regarding the treatment of factory waste, the appellant cannot carry out their manufacturing activity. Therefore, the effluent treatment service received by the appellant is in relation to the manufacture of the final product, and the same is an admissible input service, and credit must be allowed.
The department contended that the effluent treatment activity is not related to the manufacture of the final product.
The tribunal relied on the decision of the Supreme Court in the case of Indian farmer Fertiliser, which held that the effluent treatment activity is indeed in or in relation to the manufacture of the final product; therefore, the CENVAT credit cannot be denied.
Counsel For Appellant: Prakash Shah
Counsel For Respondent: R. R. Kurup
Case Title: UPL LTD. Versus C.C.E. & S.T.-VALSAD
Case No.: EXCISE Appeal No. 10583 of 2016